Hello and welcome to our last podcast episode of the year. As if dealing with the Coronavirus in 2020 wasn’t crazy enough, the government is taking government funding authorizations down to the wire this year. As I’m recording this on Monday, December 28, the president has signed the monstrous 5,593 page, 2021 Appropriations Act. This Act includes authorization and details of the second round of Coronavirus stimulus checks and federal unemployment assistance, as well as a number of other changes.
Expect to see more information on all this in the coming days and weeks. To roll everything up, remember if you got a stimulus check in the first round, you should get another soon, $600 for each eligible person. If didn’t receive a check, but your income is lower this year than last, and below the phaseout threshholds, you will receive the stimulus benefits as a tax credit on your 2020 tax return. Unemployment benefits have been extended another 11 weeks, and for that time will include an extra $300 federal benefit, and will begin in the first week of unemployment. We talked about two changes to tax deductions. Itemizers can now deduct medical expense over 7.5% of AGI. The 90% of people who do not itemize can receive an above the line deduction for up to $300 per return for 2020. This was extended to 2021 and joint filers will be able to deduct $600 in 2021. If you claimed the Earned Income Tax Credit or Additional Child Tax Credit last year, but will have less earned income for 2020, you can use your 2019 income to calculate your 2020 credit. This should prevent you from losing out on those credits when you file your taxes this spring. If you have a Flexible Savings Account with funds left over at the end of the year, check with HR to see if they will be authorizing participants to rollover those funds to use next year.
I know his has been an earful of talk about taxes, but the just signed government funding authorization does have something in it for just about everyone. I hope you have found this useful. I you have any questions, reach out to me at katie@moneypilotadvisor.com. And I especially want to wish you a Happy New Year and good riddance to 2020.
